Here's Why Whole Foods Lets Employees Look Up Each Other's Salaries

Have you ever wondered how much money your boss makes? If you
worked at Whole Foods, you could look it up and find out.

Leaders of the supermarket chain believe in keeping employees as
informed as possible, even when it comes to pay. Under the
company's open policy, staff can easily look up anyone's salary
or bonus from the previous year — all the way up to the CEO
level.

The unusual Whole Foods policy is designed to both encourage
conversations about salary among staff members and to promote
competition within the company, according to "The Decoded Company: Know Your Talent Better Than
You Know Your Customers," a new book by entrepreneurs Leerom
Segal, Aaron Goldstein, Jay Goldman, and Rahaf Harfoush on
innovative management practices.

Whole Foods co-CEO John Mackey introduced the policy in 1986,
just six years after he co-founded the company. In the book, he
explains that his initial goal was to help employees understand
why some people were paid more than others. If workers understood
what types of performance and achievement earned certain people
more money, he figured, perhaps they would be more motivated and
successful, too.

"I'm challenged on salaries all the time," Mackey explained.
"'How come you are paying this regional president this much, and
I'm only making this much?' I have to say, 'because that person
is more valuable. If you accomplish what this person has
accomplished, I'll pay you that, too.'"

Beyond making compensation data available to all employees, Whole
Foods also has its managers post their store's sales data each
day and regional sales data each week. Once a month, Whole Foods
sends each store a detailed report on profitability and sales at
each of the chain's locations. In fact, in the late 1990s the
widespread availability of so much detailed financial data led
the SEC to classify all of the company's 6,500 employees as
"insiders," according to a 1996 story by Fast Company.

Mackey and others at Whole Foods believe that a culture of shared
information helps create a sense of a "shared fate" among
employees. "If you're trying to create a high-trust organization,
an organization where people are all-for-one and one-for-all, you
can't have secrets," he says in the book.

For their part, the authors applaud Whole Foods' practices. They
contend that its open policies prove the benefits of
experimenting with data and using information to establish a
"direct relationship between an individual's decisions and their
impact on the business" — something the grocery chain
accomplishes by giving each employee high-level access to the
company's financial data, and therefore a greater stake in the
business.

"Whole Foods is an intriguing example of a company that has
successfully bridged the gap between soft-hearted values and
logic-driven business acumen," the authors write. "The
combination has resulted in a highly motivated workforce with a
deep sense of community who value productivity."

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